The South China Sea functions
as the throat of the Western Pacific and Indian oceans — the mass
of connective economic tissue where global sea routes
coalesce.

Here is the heart of Eurasia’s
navigable rimland, punctuated by the Malacca, Sunda, Lombok, and
Makassar straits.

More than half of the world’s
annual merchant fleet tonnage passes through these choke points,
and a third of all maritime traffic worldwide.

The oil transported through the Malacca Strait from the Indian
Ocean, en route to East Asia through the South China Sea, is
triple the amount that passes through the Suez Canal and fifteen
times the amount that transits the Panama Canal.

Eighty percent of Japanese
and 39 percent of Chinese oil imports pass through the Indian
Ocean en route from the Middle East. Chinese firms also have
billions of dollars of investments in East Africa, concentrated
primarily in the oil and gas, railways and roads, and other
mining sectors.Asia Maritime Transparency
Initiative

Roughly two thirds of South
Korea’s energy supplies, nearly 60 percent of Japan’s and
Taiwan’s energy supplies, and 80 percent of China’s crude oil
imports come through the South China Sea.Whereas in the
Persian Gulf only energy is transported, in the South China Sea
you have energy, finished goods, and unfinished
goods.

In addition to centrality of location, the South China Sea has
proven oil reserves of seven billion barrels, and an estimated
900 trillion cubic feet of natural gas.

If Chinese calculations are correct that the South China Sea
will ultimately yield 130 billion barrels of oil (and there is
some serious doubt about these estimates), then the South China
Sea contains more oil than any area of the globe except Saudi
Arabia. Some Chinese observers have called the South China Sea
“the second Persian Gulf.”

Five different countries
control some land features in the Spratly Islands, while just
one state controls the Kuril Islands, Liancourt Rocks, Senkaku
Islands, and Paracel Islands.Asia Maritime
Transparency Initiative

If there really is so much
oil in the South China Sea, then China will have partially
alleviated its “Ma- lacca dilemma” — its reliance on the narrow
and vulnerable Strait of Malacca for so much of its energy
needs coming from the Middle East.

And the China National Offshore Oil Corporation has invested
$20 billion in the belief that such amounts of oil really do
exist in the South China Sea. China is desperate for new
energy. Chinese oil reserves account for only 1.1 percent of
the world total, while it consumes over 10 percent of world oil
production and over 20 percent of all the energy consumed on
the planet.

It is not only location and
energy reserves that promise to give the South China Sea
critical geostrategic importance, it is the territorial
disputes surrounding these waters, home to more than two
hundred small islands, rocks, and coral reefs, only about three
dozen of which are permanently above water.

Yet these specks of land, buffeted by typhoons, are valuable
mainly because of the oil and natural gas that might lie nearby
in the intricate, folded layers of rock beneath the sea. Brunei
claims a southern reef of the Spratly Islands.

Malaysia claims three islands in the Spratlys. The Philippines
claims eight islands in the Spratlys and significant portions
of the South China Sea. Vietnam, Taiwan, and China each claims
much of the South China Sea, as well as all of the Spratly and
Paracel island groups.

In the middle of 2010 there
was quite a stir when China was said to have called the South
China Sea a “core interest.” It turns out that Chinese
officials never quite said that: no matter. Chinese maps have
been consistent.

Beijing claims to own what it calls its “historic line”:
that is, the heart of the entire South China Sea in a grand
loop—the “cow’s tongue” as the loop is called—surrounding
these island groups from China’s Hainan Island south 1,200
miles to near Singapore and Malaysia.

The result is that all of these littoral states are more or
less arrayed against China, and dependent upon the United
States for diplomatic and military backing.

For example, Vietnam and Malaysia are seeking to divide all
of the seabed and subsoil resources of the southern part of
the South China Sea between mainland Southeast Asia and the
Malaysian part of the island of Borneo: this has elicited a
furious diplomatic response from China.These conflicting
claims are likely to become more acute as energy consumption
in developing Asian countries is expected to double by 2030,
with China accounting for half of that growth.

“Paradoxically, if the postmodern age is dominated by
globalization,” writes the British naval expert Geoffrey
Till, then “everything that supports” globalization, such
as trade routes and energy deposits, becomes fraught with
competition.

And when it comes to trade routes, 90 percent of all
commercial goods that travel from one continent to another
do so by sea.China and ASEAN
(Southeast Asia), China and Japan, and Japan and ASEAN
states have robust trade relations. The China-ASEAN trade
relationship is especially strong.Asia
Maritime Transparency Initiative

This heightened maritime
awareness that is a product of globalization comes at a
time when a host of relatively new and independent states
in Southeast Asia, which only recently have had the
wherewithal to flex their muscles at sea, are making
territorial claims against each other that in the days of
the British Empire were never an issue, because of the
supremacy of the Crown globally and its emphasis on free
trade and freedom of navigation.

This muscle flexing takes
the form of “routinized” close encounters between warships
of different nations at sea, creating an embryonic risk of
armed conflict.

One high-ranking official of a South China Sea littoral
state was particularly blunt during an off-the-record
conversation I had in 2011, saying, “The Chinese never
give justifications for their claims. They have a real
Middle Kingdom mentality, and are dead set against taking
these disputes to court. China,” this official went on,
“denies us our right on our own continental shelf. But we
will not be treated like Tibet or Xinjiang.”

This
official said that China is as tough with a country like
the Philippines as it is with Vietnam, because while the
latter is historically and geographically in a state of
intense competition with China, the former is just a weak
state that can be intimidated. “There are just too many
claimants to the waters in the South China Sea.

The complexity of the issues mitigates against an overall
solution, so China simply waits until it becomes
stronger. Economically, all these countries will come to
be dominated by China,” the official continued, unless of
course the Chinese economy itself unravels.

Once China’s underground submarine base is completed on
Hainan Island, “China will be more able to do what it
wants.” Meanwhile, more American naval vessels are
visiting the area, “so the disputes are being
internationalized.” Because there is no practical
political or judicial solution, “we support the status
quo.”

“If that fails, what is Plan B for dealing with China?”
I asked.

“Plan B is the U.S. Navy—Pacific Command. But we will
publicly remain neutral in any U.S.-China dispute.” To
make certain that I got the message, this official
said: “An American military presence is needed to
countervail China, but we won’t vocalize that.” The
withdrawal of even one U.S. aircraft carrier strike
group from the Western Pacific is a “game changer.”

In the interim, the
South China Sea has become an armed camp, even as the
scramble for reefs is mostly over. China has
confiscated twelve geographical features, Taiwan one,
the Vietnamese twenty- one, the Malaysians five, and
the Philippines nine. In other words, facts have
already been created on the ground.

Perhaps there can
still be sharing arrangements for the oil and natural
gas fields. But here it is unclear what, for instance,
countries with contentious claims coupled with
especially tense diplomatic relations like Vietnam and
China will agree upon.

Take the Spratlys, with significant oil and natural gas
deposits, which are claimed in full by China, Taiwan,
and Vietnam, and in part by Malaysia, the Philippines,
and Brunei. China has built concrete helipads and
military structures on seven reefs and shoals.

On Mischief Reef,
which China occupied under the nose of the Philippine
navy in the 1990s, China has constructed a three-story
building and five octagonal concrete structures, all
for military use.

On Johnson Reef,
China put up a structure armed with high-powered
machine guns. Taiwan occupies Itu Aba Island, on which
it has constructed dozens of buildings for military
use, protected by hundreds of troops and twenty coastal
guns.

Vietnam occupies
twenty-one islands on which it has built runways,
piers, barracks, storage tanks, and gun emplacements.
Malaysia and the Philippines, as stated, have five and
nine sites respectively, occupied by naval
detachments.

Anyone who speculates
that with globalization, territorial boundaries and
fights for territory have lost their meaning should
behold the South China Sea.